ARTICLE 4. Fund Expenditure Plan [116768. - 116770.]

Cal. Health and Safety Code - HSC 4.

in effect

Cal. Health and Safety Code - HSC § 116768. Section 116768.

The purposes of the fund expenditure plan are as follows: (a) To identify public water systems, community water systems, and state small water systems that consistently fail to provide an adequate supply of safe drinking water, including the cause or causes of the failure and appropriate measures to remedy the failure. (b) To determine the amount and type of funding necessary to implement appropriate measures to remedy a failure to provide an adequate supply of safe drinking water. (c) To identify public water systems, community water systems, and state small water systems that are at significant risk of failing to provide an adequate supply of safe drinking water, including the source or sources of the risk and appropriate measures to eliminate the risk. (d) To determine the amount and type of funding necessary to implement appropriate measures to eliminate the risk of failing to provide an adequate supply of safe drinking water. (e) To identify gaps in the provision of safe drinking water, in furtherance of Section 106.3 of the Water Code, and to determine the amount and type of funding necessary to minimize or eliminate those gaps.

Cal. Health and Safety Code - HSC § 116768.5. Section 116768.5.

(a) On or before July 1, 2020, the board shall develop and adopt a policy for developing the fund expenditure plan that includes all of the following elements: (1) A requirement that the board consult with an advisory group to aid in meeting the purposes of the fund expenditure plan as established in Section 116768. The advisory group shall include representatives of the following: (A) Public water systems. (B) Technical assistance providers. (C) Local agencies. (D) Nongovernmental organizations. (E) Residents served by community water systems in disadvantaged communities, state small water systems, and domestic wells. (F) The public. (2) Identification of key terms, criteria, and metrics, and their definitions. (3) A description of how proposed remedies will be identified, evaluated, prioritized, and included in the fund expenditure plan. (4) The establishment of a process by which members of a disadvantaged community may petition the board to consider ordering consolidation. (5) A requirement that the board hold at least one public hearing before adopting a fund expenditure plan. (b) The board, in consultation with the Department of Finance, shall annually adopt a fund expenditure plan. The board shall adopt a handbook and may update it at least once every three years. (c) On or before March 1, 2021, and every March 1 thereafter, the board shall provide to the Joint Legislative Budget Committee and the chairpersons of the fiscal committees in each house of the Legislature the most recently adopted fund expenditure plan. The board may submit the fund expenditure plan as required by this subdivision either in the Governor’s Budget documents or as a separate report.

Cal. Health and Safety Code - HSC § 116769. Section 116769.

(a) The fund expenditure plan shall contain the following: (1) A report of expenditures from the fund for the prior fiscal year and planned expenditures for the current fiscal year. (2) A list of systems that consistently fail to provide an adequate supply of safe drinking water. The list shall include, but is not limited to, all of the following: (A) Any public water system that consistently fails to provide an adequate supply of safe drinking water. (B) Any community water system that serves a disadvantaged community that must charge fees that exceed the affordability threshold established by the board in order to supply, treat, and distribute potable water that complies with federal and state drinking water standards. (C) Any state small water system that consistently fails to provide an adequate supply of safe drinking water. (3) A list of public water systems, community water systems, and state small water systems that may be at risk of failing to provide an adequate supply of safe drinking water. (4) An estimate of the number of households that are served by domestic wells or state small water systems in high-risk areas identified pursuant to Article 6 (commencing with Section 116772). The estimate shall identify approximate locations of households, without identifying exact addresses or other personal information, in order to identify potential target areas for outreach and assistance programs. (5) An estimate of the funding needed for the next fiscal year based on the amount available in the fund, anticipated funding needs, other existing funding sources, and other relevant data and information. (6) A list of programs to be funded that assist or will assist households supplied by a domestic well that consistently fails to provide an adequate supply of safe drinking water. This list shall include the number and approximate location of households served by each program without identifying exact addresses or other personal information. (7) A list of programs to be funded that assist or will assist households and schools whose tap water contains contaminants, such as lead or secondary contaminants, at levels that exceed recommended standards. (b) The fund expenditure plan shall be based on data and analysis drawn from the drinking water needs assessment funded by Chapter 449 of the Statutes of 2018 as that assessment may be updated and as information is developed pursuant to Article 6 (commencing with Section 116772). (c) The fund expenditure plan shall prioritize funding for all of the following: (1) Assisting disadvantaged communities served by a public water system, and low-income households served by a state small water system or a domestic well. (2) The consolidation or extension of service, when feasible, and administrative and managerial contracts or grants entered into pursuant to Section 116686 where applicable. (3) Funding costs other than those related to capital construction costs, except for capital construction costs associated with consolidation and service extension to reduce the ongoing unit cost of service and to increase sustainability of drinking water infrastructure and service delivery.

Cal. Health and Safety Code - HSC § 116770. Section 116770.

The fund expenditure plan may include expenditures for the following: (a) The provision of replacement water, as needed, to ensure immediate protection of health and safety as a short-term solution. (b) The development, implementation, and sustainability of long-term drinking water solutions, including, but not limited to, the following: (1) (A) Technical assistance, planning, construction, repair, and operation and maintenance costs associated with any of the following: (i) Replacing, blending, or treating contaminated drinking water. (ii) Repairing or replacing failing water system equipment, pipes, or fixtures. (iii) Operation and maintenance costs associated with consolidated water systems, extended drinking water services, or reliance on a substituted drinking water source. (B) Technical assistance and planning costs may include, but are not limited to, analyses to identify and efforts to further opportunities to reduce the unit cost of providing drinking water through organizational and operational efficiency improvements, and other options and approaches to reduce costs. (2) Creating and maintaining natural means and green infrastructure solutions that contribute to sustainable drinking water. (3) Consolidating water systems. (4) Extending drinking water services to other public water systems, community water systems, state small water systems, or domestic wells. (5) Satisfying outstanding long-term debt obligations of public water systems, community water systems, and state small water systems where the board determines that a system’s lack of access to capital markets renders this solution the most cost effective for removing a financial barrier to the system’s sustainable, long-term provision of drinking water. (c) Identifying and providing outreach to persons who are eligible to receive assistance from the fund. (d) Testing the drinking water quality of domestic wells serving low-income households, prioritizing those in high-risk areas identified pursuant to Article 6 (commencing with Section 116772). (e) Providing services under Section 116686.

Source: CA Legislative Counsel Bulk DataURL: https://downloads.leginfo.legislature.ca.gov/pubinfo_2025.zipFetched: 6/27/2026